Price trend away from 100/200 hour MA
Last week, the GBPUSD traded lower but in a up and down range for most of the week (see red box in the hourly chart below). From Monday to Friday, the price traded above and below the 100 and 200 hour MAs (blue and green lines). The lows stalled in a 1.3531 to1 1.3544 range (on Monday, Wednesday, Thursday and Friday). The price on Friday closed below the 100 and 200 hour MAs.
Today, the early price action took the price below the lows from last week AND a lower swing line going back to December 24 time frame at 1.35212. The 38.2% of the move up from the December 21 low has also been breached at 1.35057. The low reached 1.34576 so far.
The next downside target is down at 1.34448. That is the 50% retracement of the move up from December 21.
Close risk for sellers is now the 38.2% at 1.35057. Above that, the swing area at 1.35212-347 would be eyed (yellow area).
Drilling to the 5-minute chart, the falling 100 bar MA at 1.34907 and a downward sloping trend line near the same level is a close hurdle that if broken to the upside, could lead to some corrective upside probing. Keep that area in mind. Failure to down that (and then get above the falling 200 bar MA or green line) and the sellers are in firm control (see chart below).
Adam has some posts on the fundamentals from PM Johnson and BOE Tenreyo.
